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Phuket Tourism Sails Into Headwinds But Sees Steady, Long-Term Growth

For the most part, Phuket’s tourism industry saw an incredible growth trajectory in 2018 as Thailand’s most popular island resort welcomed nearly five million visitors in the first half of the past year alone. The sector, which functions as the main growth engine to related industries like the property market, is expected to continue thriving over the long term.

By the end of 2018, around nine million passengers have passed through the province’s increasingly busy airport, and the figures pointed to an eight per cent year-on-year jump, according to the latest market update issued by C9 Hotelworks. When the H1 2018 data is compared to the same period in the previous year, the growth rate amounted to an impressive 17 per cent.

In essence, the boom time remains in effect in Phuket tourism though there were the usual bumps. Unexpectedly, passenger arrivals from China slowed down in the second half of the year following the uptick recorded from January-June 2018, which C9 said zoomed up by 45 per cent.

Mainland Chinese Tourists

It appeared that Chinese tourists have decided to try alternative destinations in the region. Per the report from China’s tourism authorities, the bulk of travellers from Mainland China found their way to Japan, Singapore and Vietnam instead.

And one immediate result of the diversion, thought to be a temporary trend, is the notable decline of hotel demand in Phuket. C9’s report indicated that market-wide occupancy in the area dropped by four per cent during the observed period.

The slowdown was absorbed by the industry, and according to Bill Barnett, C9 Managing Director, the impact was most felt in the months of August through October.

Barnett, however, maintained his optimism and told Property Report: “A soft landing ensued in the final two months of the year driven mostly on rates, and by year-end, the new normal kicked in.”

Staying On The Course

Industry experts said the current pressure on Phuket’s tourism sector will likely continue to bother but as far as Barnett is concerned, “we expect Phuket tourism will remain stable in the long term.”

“Moving forward Phuket is seeking to expand through more diverse markets and demand segments,” he added.

Sure enough, Phuket has been attracting travellers in big numbers from other source markets and the biggest gain so far came from India. In 2018, the flow of Indian visitors to the island grew by 56 per cent, thus making the country the top growth source market for the island, followed by Hong Kong, Malaysia, Russia and the United States.

C9 attributed the growth to the increased direct flights from India that mostly originated from New Delhi, Mumbai and Bengaluru.